Microsoft believes CEO Steve Ballmer is underpaid

Microsoft's current CEO Steve Ballmer has had his share of knocks from the media and financial analysts for his role in leading the company. However, in Microsoft's 2011 proxy statement that it filed today with the US Securities and Exchange Commission, the company's own assessment of Ballmer is that he isn't paid enough for what he does. Part of the reason for that decision is that Ballmer has elected not to participate in Microsoft's equity compensation plan.

According to the proxy statement;

"His award under the Incentive Plan is payable entirely in cash, and is correspondingly smaller than those made to the other Named Executive Officers. As the principal leader of Microsoft, Mr. Ballmer focuses on building our long-term success, and, as a significant shareholder, his personal wealth is tied directly to Microsoft’s value. While the Committee and the Board believe Mr. Ballmer is underpaid for his role and performance, they have accepted his request."

The statement also went on to say that Ballmer's base salary as CEO of Microsoft is $682,500 a year, with a cash bonus of $1,365,000, giving him an annual cash total of $2,047,000. Microsoft estimates that Ballmer's peers receive a base salary of $1,400,00 a year along with a cash bonus of $4,500,000. Ballmer was named as CEO of Microsoft back in 2000, but became the sole leader in 2008 after Microsoft chairman Bill Gates decided to no longer work at the company on day-to-day business activities.

Ballmer's leadership at the company has come under criticism due to the fact that Microsoft's stock price has dropped over the past decade. Recently IBM's market value went past Microsoft's for the first time since 1996.

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I think Steve Ballmer is doing a great job. I mean a big bald man. He is not good looking as a sales man. But he has this big willpower, and is very good to remember, and good to talk to a huge audience with conviction.
I think business and consumers have a big trust in Microsoft and Steve Ballmer

A market share and a market capitalization aren't the same thing.

"Recently IBM's market share went past Microsoft's for the first time since 1996." - the link in this sentence takes to an article about market cap.

People blame Ballmer because stock traders refuse to care about MSFT. Logical? Not really, but there you have it. If big investors decided for whatever reason (Win7? Kinect? Win8?) to bid up MSFT, folks would be happy instead of disgruntled. However, if he were to depart, investors wouldn't suddenly, magically start loving MSFT again.

I find it amusing that many people talk pests about Ballmer and how his role in Microsoft is driven the company down, etc. but the truth is that Microsoft is doing pretty well since he took place as CEO.

I'm not for or againts him, but I can't think of any other CEO that gets the bashing Ballmet does.

Ballmer seems like an out-of-touch stepdad signing blank checks instead of actively getting involved. I just can't take him seriously when all he does is blow hot hair or push empty ideas around; he doesn't even have a clue which market to follow. Everyone underneath him does all the work while he's just the bumbling spokesperson with a deep pocket.

I want to like Ballmer since he's carrying an enormous amount of pressure, but the poor guy should be on a golf course somewhere so someone else with clearer vision can lead Microsoft.

i so want to be underpaid like him! lol but his position is important for a big company like microsoft.

well good for him! anyway i like him so its nice Microsoft having him as CEO. if not Bill Gates then him. even Bill Gates support it, so cool! anyway I keep liking Microsoft more and more. and i cant wait for win8 and more Steve ballmer speechs.

Lachlan said,

really? you hate wp7, win8, xbox360, win7, kinect?

Ummm. He's the CEO. Give credit to Sinofsky for Windows. I think it was more of his ideas than Ballmer's.

Lachlan said,

really? you hate wp7, win8, xbox360, win7, kinect?


Well, yes?

Also did Ballmer personally design and implement all of those? Hardly.

The work is credited to engineers and people who actually get the job done, a CEO just generally says "Yeah this is cool, go ahead" and gets paid ten times more than even the best paid engineer who is actually responsible for the product working.

daPhoenix said,

Well, yes?

Also did Ballmer personally design and implement all of those? Hardly.

The work is credited to engineers and people who actually get the job done, a CEO just generally says "Yeah this is cool, go ahead" and gets paid ten times more than even the best paid engineer who is actually responsible for the product working.


Dont forget Ballmer been with MS ever since the start. He is and has been responsible for allot.

Lachlan said,

really? you hate wp7, win8, xbox360, win7, kinect?

Steve Ballmer is a business minded person, with little technical knowledge. None of the things you mentioned are his creations, and some of these would have done a lot better if Ballmer and managers following his mindset had not screwed them up, especially prior incarnations.

If you want to credit any 'leader' at Microsoft, Gates had more influence over these products and their original 'concepts' and future design goals than Ballmer.

From the Metro UI, to the interconnectivity to the availability of technology to consumers even if it isn't a financial success were things Gates instilled, not Ballmer that has been tearing these ideals apart.

briangw said,

Ummm. He's the CEO. Give credit to Sinofsky for Windows. I think it was more of his ideas than Ballmer's.


As a CEO, he is directing, among others, Sinofsky. While Sinofsky is a great architect, he is still under supervision of Ballmer, and if Ballmer made poor decisions as for what Sinofsky should focus on, we wouldn't be where we are today.

Northgrove said,

As a CEO, he is directing, among others, Sinofsky. While Sinofsky is a great architect, he is still under supervision of Ballmer, and if Ballmer made poor decisions as for what Sinofsky should focus on, we wouldn't be where we are today.

I highly doubt that. I really think Sinofsky needs little direction. If Ballmer was a better CEO, MS stock wouldn't be tanking. A CEO's job is to right the ship and make money for stockholders. I haven't seen anything out of that from him.

superconductive said,
Well, considering how much better of a job Bill Gates would have done if he were still CEO, I actually think Ballmer is OVERpaid.

Well Ballmer's salary is low considering the size and impact Microsoft has on the world.

But I find myself agreeing with you quite easily...

I'm not a fan of most CEO's fat salaries, but that is surprisingly low for a CEO at a corporation as big as Microsoft. Look at what that jerk from HP got as a severance bonus for further wrecking the company after only 11 months.

Why would you not support fat salary for CEOs? Just because the ammount seem big doesn't mean they doesn't deserve it. Can you run a company? Can you direct capital? If no, then you have no say in CEOs' salaries. And it's not like it YOUR company either. The market determines salary, not jealousy.

flexkeyboard said,
Why would you not support fat salary for CEOs? Just because the ammount seem big doesn't mean they doesn't deserve it. Can you run a company? Can you direct capital? If no, then you have no say in CEOs' salaries. And it's not like it YOUR company either. The market determine salary, not your opinion.

Let me clarify: I meant excessive pay and bonuses for CEOs who are running companies in trouble and still receive those bonuses after doing a poor job. I don't understand how a company in trouble can justify grossly overpaying a leader who doesn't even do the job right. Specifically, I am talking about the financial companies such as AIG, Lehmann, etc. which screwed over the entire company. Another example is the recently ousted HP CEO. He didn't do his job very well, so why was it in the contract that he should still receive his "bonus"? When a company is doing poorly like HP apparently is now, they shouldn't have included that.

If you're doing well, then by all means pay the CEO as much as you want.

Apotheker didn't eff up HP all by himself. There was mixed opinions when the board voted him CEO. So I see no reason to not pay him the bonuses promised in order to end his contract. It's an insurance payment because he "could have" done something else that gained him a salary instead working at HP. The board was incompetent that eff up HP, Apotheker is only the public figure.

The established financial industry is a whole new ball game. The US is being raped and they don't even know it. Have fun occupying wallstreet while at it can y'all occupy DC as well? Tell them to get the eff out of everyone business and mind their own.

Edited by flexkeyboard, Oct 4 2011, 1:56am :

flexkeyboard said,
Why would you not support fat salary for CEOs? Just because the ammount seem big doesn't mean they doesn't deserve it. Can you run a company? Can you direct capital? If no, then you have no say in CEOs' salaries. And it's not like it YOUR company either. The market determines salary, not jealousy.

Ok, you can put away your new generation Republican talking points...

Teddy Roosevelt, Eisenhower, and Goldwater all would disagree with you, and this type of myopic thinking. (In fact they all spoke and wrote against this type of thinking again and again.)

I think Mr. Sinofsky would be more deserving of said raise. In fact, I think he'd probably be more deserving of Ballmer's position as well. Even Microsoft officials don't find Ballmer to be the best CEO around.

Jimmy422 said,
I think Mr. Sinofsky would be more deserving of said raise. In fact, I think he'd probably be more deserving of Ballmer's position as well. Even Microsoft officials don't find Ballmer to be the best CEO around.

I agree. Sinofsky would make a far better CEO. For one thing, he actually has the technological know-how, whereas Ballmer is just a sales guy, and not a great one at that.

Joey S said,

I agree. Sinofsky would make a far better CEO. For one thing, he actually has the technological know-how, whereas Ballmer is just a sales guy, and not a great one at that.
If Sinofsky is named CEO I can guarantee Microsoft's expenses will go down as he is the cheapest company exec you'll ever meet. Fortunately, he is also quite the visionary and would definitely give the employees direction.